The Warehouse Group Receives Acquisition Approach

• The Warehouse Group advised shareholders to refrain from selling shares amid potential acquisition interest.
• Sir Stephen Tindall and Adamantem Capital Partners expressed interest in acquiring The Warehouse Group shares.
• The retail group faces challenges including a drop in earnings and significant leadership changes.

The Warehouse Group has been approached by the company’s founder and an Australian private equity firm regarding potential interest in acquiring its shares.

Sir Stephen Tindall, the founder of The Warehouse, and Adamantem Capital Partners have initiated this move. Both parties have a significant interest in the future of the company. Sir Stephen, along with the Tindall Foundation, remains a major shareholder.

In light of this approach, The Warehouse Group has advised shareholders and stakeholders to hold off on selling their shares while advice is sought from the company’s directors. The company emphasised that the approach does not constitute a formal offer to acquire the business or its shares and may not result in any proposal.
Related:
The Warehouse’s Strategic Overhaul Amid Financial Loss and Sales Decline
Torpedo7 Closes Multiple Stores as Ownership Changes

This year has been challenging for The Warehouse Group, with the high cost of living and decreasing consumer demand impacting the retailer severely. In June, the company revised its full-year earnings outlook, predicting a 6 to 7 percent drop compared to last year. Underlying profit is expected to range from $22 million to $30 million, a significant decrease from $83.4 million the previous year, excluding losses from discontinued operations and potential restructuring costs.

The company has also faced internal upheaval, including the sudden departure of its chief executive and the sale of its sporting goods chain, Torpedo7, for $1.

The Warehouse Group reiterated its caution to shareholders not to sell their shares pending further advice. “The Warehouse Group Limited advises its shareholders and other stakeholders that it has received an approach from Sir Stephen Tindall and private equity firm, Adamantem Capital Partners in relation to potential interest in acquiring its shares,” it stated. “The Board of Directors cautions shareholders that the approach received did not constitute an offer by any person to acquire the business of the Company or shares of the Company, and that it, and any consideration of other alternatives, may not result in any proposal. The Company will update the market as appropriate of relevant developments.”

This potential acquisition interest comes amid a tough period for the retail group, which is focusing its efforts on its core brands: The Warehouse, Warehouse Stationery, and Noel Leeming. The abrupt departure of chief executive Nick Grayston earlier this year has compounded the company’s challenges. Additionally, the group has been in cost-cutting mode, which has included restructuring its management and addressing job cuts at its head office.

Sir Stephen Tindall, who founded The Warehouse in 1982, owns around 27% of the company, with the Tindall Foundation owning 21.31% as of July last year. Adamantem Capital Partners is an Australian investment manager.

The Warehouse Group’s financial struggles were highlighted by a $23.7 million net loss in the six months to January 28, with total group sales of $1.633 billion, down 4.9% from the previous year. Sales for The Warehouse itself were $965.6 million, a 4.7% decline from the first half of 2023. Despite these challenges, the company’s gross profit increased by 1.6% to $374.3 million.

Shares in The Warehouse rose nearly 26% today to $1.46, although they remain down 17.5% over the year.